Unsurprisingly, small business confidence remains relatively low in the UK, despite signs of increased sentiment and positivity in the North East.
Not only these, but small business owners and startups may be struggling to fund their ventures, causing some to overlook potentially crucial costs and services such as insurance.
But do you really need insurance for your first business, and what exactly does the law have to say about this?
Appraising the Law and Different Types of Insurance
Ultimately, the law of the land requires businesses to provide particular types of insurance, depending on their status, structure and the nature of the service that they provide to clients or customers.
More specifically, businesses with employees will have to hold various types of insurance, in order to provide coverage and protection for all parties involved.
For example, you’ll have to hold employee liability insurance even if you only employ a single individual, as this will protect you against the cost of workers’ compensation claims that arise as a result of illness or injury sustained at work.
Not only can the failure to provide legally-required coverage result in huge and unsustainable legal costs, but it may also incur additional fines and punitive penalties that could bankrupt even the most sturdy small business.
Other popular types of insurance include public liability coverage. This is a must for all customer-facing businesses such as shops and retail outlets, as it provides protection in the event of a consumer making a claim against your firm pertaining to injury or damage sustained at your place of work.
There are various levels of coverage to consider when it comes to public liability insurance, depending on the scale of your startup and precisely what products or services you sell to customers.
Insurance Against Cyber Risks and Re-evaluating Your Business Needs
As the challenges facing commercial ventures continue to evolve, so too do the business insurance products available in the market.
This is borne out by cyber insurance, which generally covers your business’ liability for a data breach that involves sensitive consumer information such as national insurance numbers and credit card details.
This has become a hugely popular product in recent times, with nearly half of all businesses (46%) and more than a quarter of charities (26%) having reported cyber security breaches during the previous 12 months back in 2020.
So, if you operate an online venture or hold large swathes of consumer information, you’d be well advised to invest in cyber insurance as a way of protecting your business.
On a final note, it’s also important to continually re-evaluate your insurance needs over time, particularly as your new venture scales and starts to grow organically.
Remember, this will enable you to meet new challenges as your business evolves and enters into brand new markets, while protecting your venture against huge financial risks in the future.